Filing for bankruptcy might be the most beneficial financial decision a debtor could perform. Anyone challenged by excessive creditor obligations may find themselves paying interest yearly without lowering the loan and credit card balances. Repossessions could become possible with certain assets and the stress associated with collection agency calls. Seeking bankruptcy protections in a Louisiana courtroom might be preferable once someone understands how Chapter 13 works.
A repayment plan strategy
Fear might keep several debtors away from filing for bankruptcy. They may assume that such a filing could lead to the complete liquidation of all assets, which is not the case. While some non-exempt property may face liquidation requirements, the bankruptcy court will doubtfully leave someone destitute. Rather, bankruptcy statutes intend to provide a reasonable solution to debtors and creditors while offering the debtor a chance at a fresh start.
With Chapter 13, someone earning an income enters a three to five-year payment plan designed to compensate creditors for a portion of the unsecured debt. The debtor draws up the payment plan proposal, and the court then accepts or rejects it. Creditors could make statements during the hearings, but the judge has the final say.
Taking steps to file for bankruptcy
Anyone intending to file for Chapter 13 bankruptcy must meet all income requirements and must be under the secured and unsecured debt thresholds. Additional requirements exist, such as filing all income tax returns and not having filed for either Chapter 13 or Chapter 7 within a set period of time.
Prospective filers need to attend a credit counseling course and then file the necessary bankruptcy paperwork. Some may benefit from assistance with putting the paperwork together.
Filing a bankruptcy petition becomes another vital step, as does a meeting with creditors. A confirmation hearing would follow not long afterward, and the hearing provides a chance to confirm any proposed payment plans. If accepted, the debtor must follow through with making payments.